This is the impact of the nation's largest insurer leaving Obamacare

President Obama's landmark Affordable Care Act was seemingly
dealt a huge blow Tuesday when the nation's largest insurer by
number of people covered, United Healthcare,
announced it was leaving the state exchanges in all but a
"handful" of states.

These exchanges are the cornerstone of Obamacare, which provides
a marketplace for Americans who don't have work insurance
offering coverage to them and their families.

While it would appear that United Health's exit would
radically change the game for the ACA exchanges, the impact may
not be that significant.

For one thing, United Health never really entered these
marketplaces head first. In fact, as of March 31, the company
insures only 750,000 of the more than
12 million people enrolled in Obamacare.

"The effect of a United withdrawal nationally would be modest,"
said
a study by Cynthia Cox and Ashley Semanskee of
Kaiser. "The national weighted average benchmark silver plan
would have been roughly 1% higher in 2016 had United not
participated (less than $4 per month for an unsubsidized
40-year-old)."

Cox and Semanskee found that United offered mostly high-cost
plans in just 34 states in the US as of 2016, so by removing
itself from the exchanges the impact would not be as
significant as you may think in terms of increased cost or
limited choice.

In terms of competition, if United does remove itself from all
exchanges Cox and Semanskee found that 53% of all counties
covered by exchanges would have only one or two exchanges. While
this is significant, most counties with limited options are more
rural and less populated. Therefore, the total number of people
with limited choice is still relatively low.

If United exits everywhere (again, with the exception of Harken
Health in Georgia), the number of Marketplace enrollees with
access to only one or two exchange insurers would increase (from
1.9 million to 3.8 million or from 15% to 30% of all enrollees),
and the number of enrollees with only one insurer would also
increase (from 303 thousand to 1.4 million or from 2% to 11% of
all enrollees). Still, the vast majority of
Marketplace enrollees (8.9 million or 70% of enrollees
nationally) would continue to have a choice of three or more
insurers, even in the absence of United.

Kaiser Family Foundation

This isn't to say that there won't be an impact on some people
trying to gain health insurance through exchanges. As the
researchers note, the move will disproportionately impact those
in rural areas in some Southern states. But, in aggregate, the
removal of United from Obamacare isn't a massive shift for costs
or competition.

"On average nationally, based on our analysis of 2016 insurer
premiums, United’s participation on the exchanges had a
relatively small effect on premiums,"
concluded the study.

"As a result, the weighted average benchmark premium would have
been roughly 1% higher had United not participated in 2016 (not
accounting for the possible effect changes in insurer
participation may have had on pricing behavior or the potential
for new entrants to the market)."

Now, as Cox and Semanskee note, the long-run effects of this
move are a bit more uncertain. Insurers in communities with less
competition could begin raising prices, but there are some
provisions in the ACA that would prevent that.

Also, the impact of the move politically is another issue
entirely. Republicans have been
calling for the end of Obamacare since it was passed, so
the optics of United Health's move are up for debate.

In the short-run, it doesn't appear that United Health's decision
to pull out of the exchanges will make a huge difference for most
Americans.